Photo by Jon Arman
Challenge: Construction and one-time cleanup sales down.
There is a lull in sales with construction, and Tucson, Arizona-based La Cholla Landscaping has little or no backlog. There are two to three good-sized jobs that have been approved, but they require HOA board approval. This could take a while. La Cholla has relied primarily on leads from Google and referrals, and these seem to have dried up now.
Harvester’s recommendations.
First, keep the crew busy and generate some revenue. Since finding good guys is extremely difficult, we recommend that the construction crew move over to perform enhancements on existing maintenance contracts. This will hopefully buy some time to get more construction sales while generating extra work revenue with enough gross margin to cover the added expense of a construction crew. It will also keep these skilled players on board.
Second, get more recurring maintenance revenue. The real solution to inconsistent sales from construction is to build revenue with recurring maintenance work. This will minimize peaks and valleys of revenue.
We suggest adding a telemarketing program that will identify and seek out desired maintenance account targets. Owner Gabe Lobato will need to sharpen up his presentation and sales skills to take advantage of this lead generation program. It was agreed to add this program in May. Harvester Ed Laflamme will be meeting with Lobato and this service provider leader to review the process and to get Lobato up to speed to take this on.
Challenge: Pricing on a complex irrigation retrofit.
La Cholla has landed a new commercial job and they were 80 percent higher than the existing service provider. One of the main “pain points” for the customer has been the irrigation system. La Cholla has now been tasked to bring the irrigation up to speed. The Harvesters have reviewed several options on pricing that would be a win-win for both La Cholla and his customer. Let’s see how Lobato fairs on this opportunity.
Challenge: People.
It’s hard to find good people, especially drivers. We have suggested that Lobato consider a much more aggressive approach on a signing and retention bonus.
We like the 1-2-3 program that pays out a $100 bonus at the end of 90 days, a $200 bonus at the end of six months and a $300 bonus at the end of one year.
We also suggest that we keep in touch with what the fair market rate is for these positions and not fall behind in base wages.
La Cholla should also consider a bonus program that recognizes team members who work safely, efficiently and effectively.
